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CALGARY, ALBERTA--(CCNMatthews - July 5, 2006) - Zargon Energy Trust (TSX:ZAR.UN) (TSX:ZOG.B) ("Zargon") is pleased to announce the increase to the Exchange Ratio of the exchangeable shares of Zargon Oil & Gas Ltd. from 1.15269 to 1.15941. This increase will be effective on July 17, 2006.

The following are the details of the calculation of the Exchange Ratio:


                                    Five day          Effective
                                    Weighted               Date Exchange
                                     Average             of the    Ratio
Record                               Trading Increase  Increase    as of
Date of      Opening     Zargon's   Price of       in        in  Effect-
Zargon's    Exchange Distribution   Zargon's Exchange  Exchange      ive
Distribution   Ratio     per Unit      Units Ratio (1)    Ratio     Date


June 30,     1.15269       $ 0.18 $ 30.86525  0.00672   July 17, 1.15941
   2006                                                    2006

(1) The increase in the Exchange Ratio is calculated by multiplying Zargon's distribution per unit by the Exchange Ratio immediately prior to the distribution record date and dividing by the five day weighted average trading price of Zargon's units.

A holder of exchangeable shares can exchange all or a portion of their holdings into Zargon Energy Trust Units, at any time, by giving notice to their investment advisor or Valiant Trust Company at its principal transfer office at Suite 310, 606 - 4th Street S.W., Calgary, Alberta, T2P 1T1.

Based in Calgary, Alberta, Zargon's securities trade on the Toronto Stock Exchange and there are currently 16.656 million trust units (ZAR.UN) and 2.287 million exchangeable shares (ZOG.B) outstanding. After giving effect to the conversion privilege of the exchangeable shares and the July 17, 2006 revised exchange ratio there would be a total of 19.308 million trust units outstanding.

In order to learn more about Zargon, we encourage you to visit Zargon's website at www.zargon.ca where you will find a current shareholder presentation, financial reports and historical news releases.

FOR FURTHER INFORMATION PLEASE CONTACT:

Zargon Energy Trust
C.H. Hansen
President and Chief Executive Officer

or

B.C. Heagy
Vice President, Finance and Chief Financial Officer
(403) 264-9992
Email: zargon@zargon.ca
Website: www.zargon.ca